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Pay Equity for Lower Ranks

Pay Equity for Lower Ranks
Human Resource Executive
By Kristen Frasch
Published: January 23, 2017

We’ve been focusing, along with the rest of the media, on gender pay equity and wage gaps for some time now.

But this latest study from the Academy of Management that’s going into the February issue of the Academy of Management Journal shows something we’ve never reported on: the fact that women managers foster pay equity between the genders, but only for low-ranking employees.

The study, based on actual manager-subordinate reporting relationships in 120 branches of a large U.S. bank, takes into account two different approaches to combatting pay inequity. One consists of pay formalization, which seeks to minimize personal biases by mandating the use of detailed written rules to determine compensation. The other, less formalized approach, looks to the increasing number of female managers in the workforce, and the power they wield to set pay.

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